This video is a overview of consolidation accounting when preparing consolidated financial statements under ASC 810. ASC 810 is the GAAP standard for the consolidation of business business entities. Watch this Video Next ➡️    • Elimination Entries when Consolidating Fin...  

Understanding consolidated financial statements is crucial for accountants and finance professionals. In this video, we break down ASC 810, covering the key concepts of consolidation accounting, including:

✅ What consolidation means and when it's required
✅ The difference between the voting model and variable interest model (VIEs)
✅ How to combine revenues, expenses, assets, and liabilities
✅ Elimination entries for intercompany transactions, dividends, and equity
✅ Scope exceptions under ASC 810

Watch the full Consolidation Accounting Series ➡️    • Accounting and Finance ➡️ Comprehensive Re...…

📌Consolidation Accounting considerations to think through:

1) Why do you consolidate legal entities?👉 A larger business generally speaking is made up multiple entities which reflect a full economic entity.

2) What are you consolidating?👉 You are consolidating entities that are controlled through ownership and/or have the power to control an entity. Consolidation accounting reflects the total combined assets, liabilities, revenue and expenses along with eliminating any intercompany activity.

3) When do you consolidate financial?👉 There are various reasons to consolidate a full economic entity, but several include: financing, audits, equity raises, public company reporting, etc.

4) How do you consolidate business entities?👉 Follow ASC 810 which defines how a parent entity should consolidate controlling financial interest either by a voting interest or by variable interest.

📌Supporting resources:

➡️Equity Method Accounting - GAAP Accounting for Investments    • Accounting for Equity Method Investments (...  

➡️Twitter Thread on Consolidated Financial Statements: twitter.com/patrickbrayCPA/thread/1679913600259850…

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Chapters:
0:00 - Introduction
0:16 - ASC 810
1:03 - What to Consolidate
2:53 - Voting Model
3:36 - Variable Interest Model
4:29 - Variable Interest Exceptions
5:20 - Variable Interest Entiti